Financial Know HowFinancial Know How
Ask an expert – Should I seek a second opinion about my small business?
Our answer this month comes from Brandon Pahl, a Small Business Advisor and Certified Financial Planner with Scotiabank in Barrie, ON. Brandon addresses why small business owners should seek a second opinion. The objective of the second opinion is to provide business owners with a different look at their business operations and prospects.
RRSP or TFSA: Which is best for entrepreneurs
With the March 1st deadline for registered retirement savings plan (RRSP) contributions rapidly approaching, the pressure is on to maximize your savings to lower your tax bill. But now with Tax-Free Savings Accounts (TFSAs) competing for savings dollars, some small business owners may be asking which one is best for them.
Why entrepreneurs should consider RRSPs
As the March 1st deadline nears for 2010 registered retirement savings plan (RRSP) contributions, it’s time for entrepreneurs to consider topping up their existing RRSPs or starting new ones. Depending on your situation, an RRSP may make sense; and if you are a small business owner, they are an easy option for lowering your taxes while ensuring that you have enough money available for a comfortable retirement.
How do I get a meeting with a venture capitalist?
Our answer this month comes from Gerard Buckley of Jaguar Capital, who has more than 30 years of experience in capital markets working with Fortune 500 companies.
How to get paid quickly: Tips for boosting cash flow
A great way to boost cash flow is to get your customers to pay you on delivery or even sooner. But how do you convince them to hand over payments that quickly? For that you need incentives. Here are some suggestions on how to get your customers to pay you promptly:
How to get more from your bank
Your Small Business advisor is a key member of your business support team. So it’s important that the two of you have a strong relationship. Many small business owners may not feel they have the time to meet regularly with their Small Business advisor. But it’s hard to build a relationship with someone you rarely see.
Tax-effective methods for building wealth
As a small business owner, your focus is probably on growing your business as a means to wealth. But that doesn’t mean you—and your business—won’t benefit from using often overlooked tax-effective methods for building your personal wealth using the proceeds of your ongoing business activities. You’ll enhance your company’s cash flow and leave yourself with significantly enhanced retirement savings. Here are a few strategies that you can consider. Discuss them with your financial advisor, accountant and lawyer to see if any of them are right for you.
How do I deal with a delinquent client?
Our answer this month comes from Kimberly Coaker, Scotiabank Small Business advisor.
Scotiabank Small Business Borrowing Tool
Does your personal credit history matter?
If you’re going into business for the first time, you may be wondering how a bank decides to give you a loan.
Cash flow for seasonal businesses
Maintaining a healthy cash flow can be a challenge for any company, but especially for a seasonal business. If you generate most of your income over part of the year, it’s not easy to keep cash handy through the slow season until business—and the expenses that go with it—picks up again.
Make the most of holiday downtime
If you are closing your office or having shorter hours over the holidays, consider using some of that quiet time to wind up your 2010 bookkeeping. Getting the data early means you can get started on tax preparation. More importantly, knowing the numbers is crucial to making decisions for next year, such as whether you can increase your marketing budget or hire more staff.
Ask an advisor
This month’s question is answered by Keith Davidson, Account Manager, Small Business in Campbell River, B.C.
Is it safe to use my home equity to grow my business?
Tips for a successful loan application
Do you want a loan from your bank to help your business grow? Getting financing at the right time can let you take advantage of opportunities for growth.
The best time to apply for credit is as soon as possible after you’ve identified your new goals and strategies so you have the resources to make them a reality.
Deciding How to Reinvest Your Profits
Reinvesting your profits in your business is usually a lucrative move. This will help you to qualify for financing, and may also be able to negotiate better terms on existing loans. If you’re looking to expand, a sluggish economy actually works in your favour: now is a great time to lock in low prices from both existing and new suppliers.
Every week is Small Business Week
October 17-23, 2010, is Small Business Week. To mark it, events are being held across the country to help entrepreneurs network with their peers and professionals. This is a great idea, with just one drawback: one week is not nearly enough time to focus on the issues that affect the 97.5% of businesses that qualify as small.
Building a Solid Business Team
As an entrepreneur, you may have specialized skills in marketing or product development. But there are areas where it makes good sense to draw on the experience of professionals.
For example, if your business is going to do well, the numbers have to add up. A good accountant can help you understand margins and profits and help you anticipate problems.
Managing Costs
You have to spend money to make money, but the reality is most successful businesses are very strategic about their spending. It’s all about minimizing the costs and maximizing the benefits.
Think of it this way: your business must deliver top-quality products, outstanding service and expertise, and build long-term loyalty in your customer base. In a competitive market, these elements are non-negotiable if you are going to unlock the potential in your business.
The question then becomes: how do I deliver these non-negotiable elements in an effective way—for the lowest cost? This is the underlying question for any costmanagement strategy.
Leading Success
The business owners we met on our cross-Canada tour had a lot to tell us about the process of effectively leading their businesses. They showed us how effective leaders move their businesses forward—toward their vision of future success. From one business owner to the next we saw different styles of leadership. However, the strongest leaders demonstrated an approach that was forward-thinking and action-oriented, with an overflowing and infectious level of enthusiasm!
Cash Flow
Growing businesses consume money. Many have called cash flow the life blood of small business, and it’s true. While a great business idea, a passionate entrepreneur, and customers ready to buy are the building blocks of a successful business, cash is the life force that transforms and feeds the potential of the enterprise. It allows it to thrive or, if there is not enough of it, can make the business anaemic and constrained. In the worst cases, it can ultimately be the factor that ends its existence.
Cash Flow is King
Susan Baka, experienced information specialist, writer, and international speaker specializing in the women's market, talks about cash flow strategies for your small business.
Receivables Management Worksheet
When you grant deferred payment options to customers, you are extending credit, which becomes receivables to your business - delivering your product or service upfront with payment to follow. Effectively managing these receivables will reduce losses due to uncollectable accounts by focusing on three key areas:1. Credit Policies; 2. Collection and Follow-up; and 3. Administrative Practices
Capital Planning Worksheet
Planning and optimizing the structure of capital within your small business requires a systematic evaluation of your current funding structure, future capital needs, and an understanding of what sources of capital may be available to you.
Inventory Management Worksheet
Inventory can be one of the largest investments made by a small business. Effective management of this critical asset will you have sufficient quantity, of the right product, at the right time, in good condition, and that these objectives are met using the optimal amount of cash flow. Inventory management practices can be assessed by managing the size and makeup of inventory on hand, managing the rate at which inventory turns over, and managing the availability and cost of inventory financing. This worksheet is designed to help you evaluate your inventory management practices and to identify areas where you need additional focus to achieve your business’ specific objectives.
Receivables Management Worksheet
When you grant deferred payment options to customers, you are extending credit, which becomes receivables to your business - delivering your product or service upfront with payment to follow. Effectively managing these receivables will reduce losses due to uncollectable accounts by focusing on three key areas:1. Credit Policies; 2. Collection and Follow-up; and 3. Administrative Practices
Credit Application
Use this example of a Credit Application to understand what information will be required when applying for credit.
Can I get a loan without a business history?
In many cases, you can. While each business is different, there are many situations where you can get credit without a business history or formal business projections. The first step is to sit down together and discuss your specific plans and goals. That allows me to identify strategies and financial solutions that are appropriate for you. It's helpful if you bring your last two Notices of Assessment and your latest tax return. I've seen many different circumstances where businesses need access to cash in a hurry - for instance, to meet seasonal demand or a large unexpected order.
A Blueprint for Cash-Flow Success
Jenna is a 34-year-old entrepreneur who is facing some cash-flow challenges — a familiar concern to small business owners just starting out. To help her tackle these concerns head on, her small business banker introduced her to a financial diagnostic tool. The result? Jenna was able to take charge of her cash flow. Find out how she did it.
